The stock market debut for the Chinese smartphone maker that has become a dominant player in the African smartphone market has been a major hit.
There was a 96 per cent rise in the stock prices of Transsion, which is a leader in Africa’s phone market, soon after its shares were listed publicly at the newly created Nasdaq-style tech stock market of China. The company is the owner of Tecno brand – arguably the most famous smartphone brand in Africa.
And even after loosing some steam later on, the stocks closed 64 per cent higher than opening day price which set the valuation of the company at 46.24 billion yuan or $6.48 billion.
According to the IPO prospectus of the company, about 14 per cent of company is controlled by Zhu Zhaojiang, founder and chairman of Transsion, after the public listing of the company. Calculated on the basis of Monday’s closing share price, the worth of the stake of Zhaojiang is 6.41 billion yuan or $898 million.
The IPO of Transsion on the Star Market, touted as China’s replica of the United States’ Nasdaq exchange, allowed the company to raise as much as $400 million. There was huge interest among investors to acquire shares of the company and the company was able to allocate shares to about only one in 20 online bidders while just three in 1,000 of the offline bidders were given shares of the company.
It is interesting that this Shenzhen-based company does not sell any of its products in the Chinese market even though it owns two other brands – the Itel and Infinix brands. However, according to data from IDC, the company is a very dominant player in the African market with about almost 49 per cent share of the market.
The company generated 22.65 billion yuan or $3.3 billion) in revenue globally in 2018 from the sale of 124 million cell units worldwide.
According to the prospectus of the company issued at the time of the IPO, its products have features that “highly suit our target market,” and its repertoire of products includes smartphones that have inbuilt nighttime photography settings that have been created to suit photography of users of darker skin tones.
Smartphones that have a large battery capacity and heat protection for electronics are also among some of the technology used by Transsion in its phones for Africa. The long battery life has been a reason for its success in countries such as Nigeria, South Africa and Ethiopia where power supply is very erratic and unreliable which means that people are often left unable to charge their phones for long periods of time.
Another plus point for the company’s phones is their pricing. The price range for the phones of Transsion range begins with as little $9 for phones without smart features. According to the prospectus of the company, last year, it sold almost 60 million Itel phones at that very low price. Additionally, more than 30 million non-smart Tecno phones at about $11 each were also sold by it in the same period.
(Adapted from CNN.com)